How to Minimize Risks While Trading

One of the important facts about the stock tradingis that it
is always accompanied with great risks. Thus the traders are always in search
of trading strategies which involves minimum risks. Some of the techniques
which involve minimum risks are:

1)Long Term
Investments

2)Diversification
of Portfolio

3)Arbitrage
techniques

4)Spread
techniques.

Out of the various styles of trading available for the
traders including the intraday trading, the short term trading and the long
term trading, the long term investment is considered to be a risk free style of
trading. The long term investment in good companies has always given positive
results. In the long term investment the investor buys the shares and keeps it
for a long time. The period of holding usually ranges in years. The long term
investments with a diversified portfolio minimize the risks to a further extent
and are most likely to give a positive result. The diversification prevents the
trader from incurring heavy loss when the price levels of Shares of a
particular sector falls.

Besides the long term investment there are strategies which
are considered to be Risk Free. The arbitrage and the spread techniques are the
common among them. In case of arbitrage the price difference between the price
levels of same stock in two different exchanges is considered. One of the
stocks on the exchanges with higher price is sold and the other one with low
price is bought. Thus the trader incur a fixed profit at the time these buy and
sell calls are placed. In case of spread technique the same stock is bought and
sold.

The above mentioned methods are extensively used by technical
analysts in financial advisory firm like Money Classic Research to provide
accurate Stock Market Tips.Money Classic Research is a SEBI registered
advisory firm which is also ISO certified.